Airport Business

JUN-JUL 2018

The airport professional's source for airport industry news, articles, events, and careers.

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36 airportbusiness June/July 2018 AIRPORT GURU By Curt Castagna Should U.S. FBOs Adopt a European Model? Looking at European best practices could address challenges with individual markets across North America. All airport managers should be familiar with the old adage, "If you've seen one airport, you've seen one airport." Nothing could be closer to the truth when it comes to the current national debate regarding the evolving fixed based operator (FBO) business model. While some FBOs continue to rely on fuel sales and bundling of services for revenue (i.e., the traditional U.S. model), in many markets, as a means to compete and remain sustainable, FBOs are accommodating customers by providing competitive fuel prices and a menu of services. Thus, they have introduced individual fees for services such as aircraft parking and handling (i.e., the European model) in light of diminishing fuel margins that challenge healthy FBO operations at general aviation facilities. Through the years, due to the increased trend away from the bundled approach to FBO operations, some light general aviation aircraft owners have expressed concerns about pricing practices that could preclude reasonable access to public-use airports. This raises significant challenges for airport sponsors whose federal grant assurances require them to operate self-sustaining enterprises, while making the airport reasonably available for public use without discrimination. Airport management, like politics, is local. Unfortunately, national pressure or debate applied at a local level does not properly reflect a specific community's goals or consensus on what is best for its airport. As acknowledged by the Federal Aviation Administration (FAA) in its 2017 document entitled "Q&As – FBO Industry Consolidation and Pricing Practices," changes in the aviation industry in recent years have put FBOs under stress due to post-911 security demands and continued consolidation of the industry. Likewise, many FBO operations and facilities are under pressure to upgrade their facilities, where some buildings are functionally obsolete and not able to accommodate today's aircraft fleet. While most arguments regarding FBO pricing practices are presented from the viewpoint of the airport user, this article examines the perspective and responsibilities of the airport sponsor. How do airports fund and preserve the integrity of light general aviation aircraft/users, while fulfilling the obligation to be self-sustainable? A Signature Flight Support team member opening a valve on a 100LL tank at Mineta San Jose International Airport. Signature Flight Support Small general aviation aircraft in the hangar is Signature's Charlottesville location, where they support mix general aviation users. Signature Flight Support

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